As part of the Fed’s year-long review of its monetary policy strategy, tools and communications practices, the St. Louis Fed is assembling members of its six advisory councils, representing a geographically and industry-diverse group of stakeholders.

January 2016

In This Edition

Although the unemployment rate is strong these days, other labor-related statistics are being called weak for this stage of an economic recovery. The downward trend in labor force participation, wage growth, job reallocation and other stats started a long time ago, however.

When investors complain about low interest rates, they are usually referring to the rates on government bonds, particularly TIPS (Treasury Inflation Protected Securities). But such rates should not be seen as proxies for the rates of return on all investments. Real returns to productive U.S. fixed investment in tangible capital have not fallen over the past 25 years.

The federal government and the Fed pumped a lot of liquidity into the economy in response to the Great Recession. But the usual domestic users of such liquidity—households and businesses—increased their liquidity holdings only slightly.

To better understand unemployment in key industries, not only the unemployment rate but the duration of unemployment for those in the industry should be considered. Focusing on only the former could lead to misguided efforts to help the jobless.

Government employment has been a main driver of Jefferson City’s economy, more so than in many other state capitals. Now that public sectors everywhere are tightening their belts, Jefferson City—like many other communities—will look more to the private sector to maintain growth.